Agricultural News

Anderson Says Prices May Have Bottomed Though Contract Wheat is a Buck Lower Than Projected

Thu, 02 May 2019 18:05:10 CDT

Earlier this year, the general expectation was that the price of forward contracted wheat would have climbed up to $5.00/bu. by now. You look at the market this week, however, and see prices have instead fallen under $4.00/bu. In his weekly visit with SUNUP host Dave Deken this weekend, Oklahoma State University Extension Grain Market Economist Dr. Kim Anderson attempts to account for the market’s recent lethargy.

From what he can surmise about the situation, Anderson believes the market is harboring several reservations about this year’s crop, with particular concerns regarding the crop’s quality in terms of protein levels and the persistent lack of export demand.

Current industry projections have suggested that Oklahoma’s crop will end up significantly higher than last year’s and above its average crop size. Last year, Oklahoma produced a mere 70 million bushels. This year, it is speculated Oklahoma will raise production by 75 percent up to 120 million bushels, 23 million bushels above Oklahoma’s average production. Nationally, the same is true with estimates pegging the US HRW wheat crop well above normal. The fact that there are strong, lingering concerns over protein levels, Anderson says, has certainly impacted prices.

Meanwhile, Russia and the Black Sea Area has yet to exhaust its exportable supplies with yet another massive crop in the pipeline. Couple that with a record short in managed funds and Anderson says there is no wonder prices remain anchored.

Ever the optimist, though, Anderson believes the market is either at or near a bottom, noting that the KC July contract managed to recently nose its way back up to the $5.00 range. Recalling some seemingly worse situations from past market slumps, Anderson predicts that the trade will eventually churn its way out of this downtrend and potentially even pick up another .50 or so along the way remarking that anything can happen when nothing about the outcome of either foreign nor domestic crops is certain.

You can watch their visit tomorrow or Sunday on SUNUP- but you can hear Kim's comments right now by clicking on the LISTEN BAR below.

Beyond Deken's weekly chat with Dr. Anderson- the SUNUP crew has a very full lineup for your viewing this weekend:

This week on SUNUP, we learn from Justin Talley about the importance of controlling external parasites on cattle.

- Finally, in the Mesonet weather report, Wes Lee shows us how to use the Drift Advisor to help with deciding when to spray crops. Gary McManus says while most of the state has seen above normal rainfall, the panhandle is drying out.